No Need for GPS Until Destination Is Known

Lawmakers Must Coalesce Around Goals for Debt, Revenue, Spending Before Launching Budget Reform

I was asked three times last week by different policymakers whether a new Congressional budget process should be considered this year.

[IMGCAP(1)]The answer is no, no way, absolutely not and don’t even think about it. Here’s why.

My Beautiful and Talented Wife (the BTW) and I are avid hikers; some of the best vacations we’ve ever taken have been weeklong, 10-miles-or-more-per-day treks at high altitudes. But we always start a hike knowing where we’re headed because that’s what determines which trails to take to get where we want to go. Deciding to end up back where we started requires a very different route than if we want to be somewhere else when the day is over. And even if the starting and ending points are the same, there are usually several different ways to get there, including out-and-back and circular routes.

In other words, unless you’re willing to carry all of your equipment, forgo modern bathroom facilities and sleep under the stars (something the BTW definitely doesn’t want to do), it’s not enough to know just that you want to go hiking: You also have to know your destination.

This is what’s been needed — and missing — from all of the discussions about a new budget process that have occurred since the last major change was put in place 13 years ago. There’s simply no consensus about the fiscal equivalent of where you want to end up at the end of the day’s hike, that is, on what a new process should accomplish. Without that type of consensus, any new budget process is virtually doomed to fail. Because there will always be questions about its legitimacy and value, there will be a strong tendency not to implement it.

The consensus built in to the original modern-day budget process — the one established by the Congressional Budget Act of 1974 — was comparatively easy to agree to because the primary thing everyone wanted was a way for Congress to compete with the executive branch on budget issues. The process itself was outcome-neutral; the Budget Act has been used both to increase and decrease the deficit, and spending and revenues were both raised and lowered. From the process’s perspective, the only thing that was important was that the deadlines and procedures were followed.

Nothing that simple exists today because, instead of wanting something that is outcome-agnostic, all of the discussions about what the budget process should do are really about what should be achieved; how it happens is a secondary consideration. Although many say that reducing the deficit has to be the goal, others insist that the Congressional budget process should do that while at the same time preventing either revenue increases or spending reductions. Others say that the process should require and force the national debt to be maintained at a certain percentage of the gross domestic product; others want to apply that standard to overall spending, revenues or both. Still others want to either reduce or eliminate federal borrowing.

This is not theory or speculation: We saw earlier this year how a lack of consensus about what to do almost inevitably dooms a budget process when the Senate failed to adopt legislation creating a budget commission. In the end, those wanting a commission with the stated purpose of recommending ways to reduce the deficit ended up with fewer votes than those who were more worried that the commission might propose a tax increase to get there. Because of this lack of consensus, some Senators voted against the commission because the process that would have been put in place wouldn’t guarantee their preferred outcome.

This is why time or energy shouldn’t be devoted now to developing a new budget process. That should only happen after some type of consensus has been reached about what needs to be done on the budget, but a new process is not a substitute for whatever that ends up being.

In fact, that’s what’s happening now with the current budget process. Because there’s no agreement on what should be done or what the priorities should be, the process has gotten bogged down every step of the way as the disagreements about the best path to take mean that battles are continuously fought and nothing is ever settled.

The good news is that coming up with a new budget process won’t be that difficult once a consensus is reached about what it should do. Unlike the situation in the 1970s, when the Congressional Budget Act was debated in some form for over two years, we now know a great deal more about how a process could and should work. My guess is at that point the basic outlines of a process will take only about an hour to develop.

The alternative is to start with a new proposed budget process and then hope that a consensus develops around it. That’s the budget equivalent of telling someone to go take a hike.

Stan Collender is a partner at Qorvis Communications and founder of the blog Capital Gains and Games. He is also the author of “The Guide to the Federal Budget.”